In brief
The long overdue “Mainland Judgments in Civil and Commercial Matters (Reciprocal Enforcement) Bill” (“RE Bill“) was passed by the Hong Kong Legislative Council on 26 October 2022. The RE Bill implements the “Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by the Courts of the Mainland and of the Hong Kong Special Administrative Region”, which was signed between the Supreme People’s Court of the Mainland and the HKSAR Government on 18 January 2019 (“Arrangement“).
The RE Bill provides a more comprehensive mechanism for reciprocal recognition and enforcement of judgments in civil and commercial matters between the two jurisdictions, thereby reducing the need to re-litigate the same disputes in both places. This will offer better protection and certainties to parties’ interests and enhance Hong Kong’s competitiveness as a regional center for legal and dispute resolution services. This alert provides an update on the same.
Key takeaways
- The RE Bill expands the scope of judgments granted by the Mainland courts to be recognized and enforced in Hong Kong.
- Compared to the Mainland Judgments (Reciprocal Enforcement) Ordinance (Cap. 597) (MJREO), which gave effect to the choice of court arrangement made between the Supreme People’s Court and the Hong Kong SAR Government in 2006, the RE Bill covers both monetary and non-monetary judgments in civil and commercial matters, as well as compensation or damages awarded in criminal proceedings. It has also removed the requirement that the parties have to agree on exclusive jurisdiction clauses when signing the agreement.
- Although the RE Bill was passed by the Hong Kong Legislative Council, it will come into effect after both Hong Kong and the Mainland put in place the relevant implementation mechanism in their respective jurisdictions and will apply to the judgments made on or after the commencement date of the RE Bill.
In more detail
The scope of judgments
Subject to the “excluded list’ mechanism, most civil and commercial cases will be covered under the RE Bill. Monetary and non-monetary judgments can be enforced. Excluded matters include judgments relating to corporate insolvency, debt restructuring and personal bankruptcy, succession of estate of a deceased, and certain matrimonial or family matters[1].
The RE Bill also removes the need for the parties to agree on exclusive jurisdiction clauses when signing the agreement. In addition, it sets out jurisdiction grounds for the purpose of recognition and enforcement, as well as grounds for refusal of recognition and enforcement.
The registration mechanism
A judgment creditor under a Mainland Judgment (as defined in the RE Bill) may apply to the Hong Kong Court of First Instance (CFI) for an Order to have the Mainland Judgment registered with the CFI on an ex parte basis, provided the following conditions are met:
- The Mainland Judgment was given on or after the commencement date of the RE Bill.
- The Mainland Judgment is effective in the Mainland.
- There was a default in complying with the Mainland Judgment’s requirement and the default occurred within two years before the date of the application and has not been made good as at the date of the application.[2]
Post-registration
A registered Mainland Judgment may be enforced in the same way as if it were a judgment originally given by the CFI.
Where a registration application is made in relation to a Mainland Judgment and it is still pending, any Hong Kong proceedings in respect of the same cause of action shall have stayed. Likewise, the party may not bring in a court in Hong Kong proceedings in respect of the same cause of action.
The judgment debtor under a Mainland Judgment registered under the RE Bill may apply to set aside the registration on the grounds as specifically set out in the RE Bill.
Next steps
The RE Bill will come into effect once both Hong Kong and the Mainland put in place the relevant implementation mechanism in their respective jurisdictions and will apply to the judgments made on or after the commencement date of the RE Bill.
[1] Reader may refer to the “Arrangement on Reciprocal Recognition and Enforcement of Civil Judgments in Matrimonial and Family Cases by the Courts of the Mainland and of the Hong Kong Special Administrative Region” signed between the Supreme People’s Court and the HKSAR Government on 20 June 2017.
[2] Clause 10 of the RE Bill.
